Considering that the baby boomer generation will retire within the next 10 years and their superannuation investments have plunged, they may have no choice but to turn to the Government for help.
In such a situation, a reverse mortgage might be the right product to help retirees bridge the gap and lighten the pressure on government coffers. But the tightening credit market has left them unable to gain access to the funding they need — and the Government is not listening.
The Senior Australians Equity Release Association of Lenders (SEQUAL) called on the Federal Government to extend the stimulus package it offered to the forward mortgage market to include reverse mortgages, suggesting a number of ways the Government could support the reverse mortgage market — but it declined to participate, according to executive director Kevin Conlon.
John Thomas, chairman of Australian Senior’s Finance (ASF) and a chairman of SEQUAL, believes the Government’s view is short-sighted.
“A lot of clients … are looking at reverse mortgages to bridge the gap. But the lack of funding available means they are unable to satisfy their needs, and a lot of those people will have nowhere else to go but to look to government agencies,” Thomas said.
By their very nature, these retirees are keen and want to look after themselves, and they want to look at it as an alternative to the pension, he said.
“If they can’t get [a reverse mortgage], a pension is their only alternative.”
— Benjamin Levy
